Side Hustle or Sole Trader? Here’s When You Need to Register for Self Assessment

Ryan Scott • 22 April 2025

Do I Need to Register for Self Assessment as a Sole Trader? | SBX Accountants Guide

If you're running a business as a sole trader, it’s your responsibility to make sure you’re paying the correct amount of Income Tax and National Insurance. To do this, most sole traders need to register for Self Assessment with HMRC – but the rules can vary depending on how much you earn and whether you’re also employed.

When Does a Sole Trader Need to Register for Self Assessment?

As a self-employed individual, you must register for Self Assessment so you can file an annual tax return. This allows HMRC to calculate what you owe in tax and National Insurance contributions. The general rule is:

🔹 If you earn more than £1,000 from self-employment in a single tax year (6 April to 5 April), you must register for Self Assessment.

This applies whether your business is full-time, part-time, or even a casual side hustle

A woman is sitting at a table counting money and receipts.

What If I Also Have a Job?

Many sole traders also have jobs where they’re taxed under PAYE. If this is the case, you’re still entitled to the £1,000 trading allowance for your self-employed income.

For example, let’s say:

You earn £25,000 a year from your employer (taxed via PAYE)
You also make £900 through a freelance business on the side
Because your self-employed earnings are below the £1,000 threshold, you don’t need to register for Self Assessment – unless you’re required to file a return for another reason (e.g. rental income, capital gains, or higher rate tax issues).

💡 SBX Tip: The £1,000 allowance only applies to gross income from self-employment – not profit – and if you choose to claim actual business expenses, you can’t use the allowance too.

Deadline to Register for Self Assessment

You must register for Self Assessment by 5 October in your second tax year of trading.

For example:

You started trading in December 2024
Your first tax year is 2024/25
You must register with HMRC by 5 October 2025
Leaving it late can result in penalties, even if you don’t owe much tax – so it’s important to get your registration in early.

How Do I Register?

Registering as a sole trader is a straightforward online process through your Government Gateway account.

Here’s how to get started:

Visit the HMRC website.
Set up or sign into your Government Gateway account.
Follow the steps to register as a sole trader for Self Assessment.
You’ll receive your Unique Taxpayer Reference (UTR) by post – keep this safe!
Already registered before? Use form CWF1 to re-register instead of starting from scratch.

🚨 SBX Tip: Allow at least 10 working days to complete the process, especially during busy tax periods.

What Happens If I Don’t Register?

If you should be registered but fail to notify HMRC, you could face:

Late registration penalties
Fines for failing to submit a tax return
Interest on unpaid tax

Even if it’s an honest mistake, HMRC can still issue a penalty. In some cases, a voluntary disclosure may help reduce the fine – SBX Accountants can help you through this if needed.

✅ Need Help Understanding Your Self Assessment Obligations?

At SBX Accountants, we specialise in helping sole traders stay compliant, reduce tax stress, and maximise what they keep. Whether you're new to self-employment or growing your business alongside a job, our team can:

Register you with HMRC
Handle your Self Assessment tax return
Advise on expenses and the trading allowance
Ensure you never miss a deadline
📞 Get in touch today and let SBX handle the paperwork while you focus on your business.